-- Total Sales for the first quarter of 2010 increase 26% over the first
quarter of 2009.
-- Zipper Sales for the first quarter of 2010 increase 48% over the same
period in 2009.
Financial Results
Sales for quarter ended March 31, 2010 totaled $8.2 million, representing
an increase of $1.7 million or 26.4% from the same period in 2009. Zipper
product sales were $4.9 million in the quarter ended March 31, 2010, an
increase of 48.1% from the same period in 2009. For the quarter ended March
31, 2010 the Company reported Trim product sales of $3.3 million compared
to $3.2 million for quarter ended March 31, 2009. The Tekfit product line
generated no sales for the quarter ended March 31, 2010, reflecting a
decline of $14,000 from the quarter ended March 31, 2009.
The sales increase in the first quarter 2010 reflects improved worldwide
economic conditions for Talon's customers in the apparel industry, higher
demand for our Talon zipper products, successful introductions of new
products for existing customers, and the addition of new customers.
The gross margin for the quarter ended March 31, 2010 was 29.6% of sales as
compared to 30.5% for the same period in 2009. The Talon Zipper group for
the quarter ended March 31, 2010 reflected a gross margin of 26.6% of sales
as compared to 24.3% for the same period in 2009. Gross margin in the Trim
product group for quarter ended March 31, 2010 was 34.7% of sales compared
to 36.9% of the same period in 2009.
Sales and marketing expenses for quarter ended March 31, 2010 were $0.7
million, or 8.0% of sales, as compared to $0.7 million, or 10.8% of sales,
for the same period in 2009. Sales expenses decreased as a percentage of
sales primarily due to lower related expenses in mainland China and a
reduction in regional support staffing. General and administrative
expenses for the quarter ended March 31, 2010 were $2.0 million or 23.7% of
sales, as compared to $1.8 million or 27.9% of sales for the same period in
2009. The increase in general and administrative expenses mainly reflected
higher personnel expenses.
For quarter ended March 31, 2010 the loss from operations was $176,000 as
compared to $535,000 for the same period in 2009. The improvement of
$359,000 or 67.2% resulted from higher gross margins of $452,000 partially
offset by slightly higher operating expenses of $93,000.
The net loss of $0.8 million or ($0.04) per share for the quarter ended
March 31, 2010 compared favorably to a net loss of $1.2 million or ($0.06)
per share for the same period in 2009.
Conference Call
Talon International will hold a conference call on Thursday, May 13, 2010,
to discuss its first quarter 2010 financial results. Talon's CEO Lonnie D.
Schnell will host the call starting at 4:30 P.M. Eastern Time. A question
and answer session will follow the presentation.
To participate in the call, dial the appropriate number 5-10 minutes prior
to the start time, request the Talon International conference call and
provide the conference ID.
Date: Thursday, May 13, 2010
Time: 4:30 pm Eastern (1:30 pm Pacific)
Domestic callers: 1-800-895-1241
International callers: 1-785-424-1056
Conference ID#: 7TALON
A replay of the call will be available later that evening and will be
accessible until June 11, 2010. The replay call-in number is 1-800-753-4606
for domestic callers and 1-402-220-2103 for international. Passcode not
required.
About Talon International, Inc.
Talon International, Inc. is a global supplier of apparel fasteners, trim
and interlining products to manufacturers of fashion apparel, specialty
retailers, mass merchandisers, brand licensees and major retailers. Talon
manufactures and distributes zippers and other fasteners under its Talon®
brand, known as the original American zipper invented in 1893. Talon also
designs, manufactures, engineers, and distributes apparel trim products and
specialty waistbands under its trademark names, Talon, Tag-It and TekFit,
to more than 60 apparel brands and manufacturers including Wal-Mart,
Kohl's, J.C. Penney, Victoria's Secret, Tom Tailor, Abercrombie and Fitch,
Polo Ralph Lauren, Phillips-Van Heusen, American Eagle and Juicy Couture.
The company has offices and facilities in the United States, Hong Kong,
China, and Bangladesh.
TALON INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended March 31,
--------------------------------
2010 2009
--------------- ---------------
Net sales $ 8,235,260 $ 6,515,754
Cost of goods sold 5,798,567 4,531,587
--------------- ---------------
Gross profit 2,436,693 1,984,167
Sales and marketing expenses 656,822 701,814
General and administrative expenses 1,955,573 1,817,523
--------------- ---------------
Total operating expenses 2,612,395 2,519,337
--------------- ---------------
Loss from operations (175,702) (535,170)
Interest expense, net 707,197 636,951
--------------- ---------------
Net loss before provision for (benefit
from) income taxes (882,899) (1,172,121)
Provision for (benefit from) income taxes (35,256) 6,407
--------------- ---------------
Net loss $ (847,643) $ (1,178,528)
=============== ===============
Basic and diluted net loss per share $ (0.04) $ (0.06)
=============== ===============
Weighted average number of common shares
Outstanding - Basic and diluted 20,291,433 20,291,433
=============== ===============
TALON INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
2010 2009
------------ ------------
(Unaudited)
Assets
Current Assets:
Cash and cash equivalents $ 1,757,772 $ 2,264,606
Accounts receivable, net 3,501,645 3,021,642
Inventories, net 1,549,533 1,679,302
Prepaid expenses and other current assets 115,061 240,554
------------ ------------
Total current assets 6,924,011 7,206,104
Property and equipment, net 2,066,825 2,280,586
Intangible assets, net 4,110,751 4,110,751
Other assets 282,824 236,386
------------ ------------
Total assets $ 13,384,411 $ 13,833,827
============ ============
Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable $ 6,392,357 $ 6,337,368
Accrued expenses 2,632,518 2,678,659
Revolver note payable 4,988,988 4,988,988
Term notes payable, net of discounts 10,288,595 9,876,114
Notes payable to related parties 268,195 265,871
Current portion of long term obligations 93,968 115,336
------------ ------------
Total current liabilities 24,664,621 24,262,336
Capital lease obligations, net of current
portion 22,036 23,477
Other liabilities 689,565 726,875
------------ ------------
Total liabilities 25,376,222 25,012,688
------------ ------------
Stockholders' Deficit:
Preferred stock Series A, $0.001 par value;
250,000 shares authorized; no shares issued
or outstanding - -
Common stock, $0.001 par value, 100,000,000
shares authorized; 20,291,433 shares
issued and outstanding at March 31, 2010
and December 31, 2009 20,291 20,291
Additional paid-in capital 55,115,597 55,070,568
Accumulated deficit (67,191,652) (66,344,009)
Accumulated other comprehensive income 63,953 74,289
------------ ------------
Total stockholders' deficit (11,991,811) (11,178,861)
------------ ------------
Total liabilities and stockholders' deficit $ 13,384,411 $ 13,833,827
============ ============
Contact Information: Company Contact Talon International, Inc. Rayna Hernandez Tel (818) 444-4128